The Philippines has secured a ¥16.5 billion loan from the Japanese government to improve the country's maritime safety capability.
The loan extended by the Japan International Cooperation Agency is equivalent to P6.8 billion, according to the Department of Finance (DOF). It carries an interest rate of between 0.01 percent and 0.10 percent, and will mature in 40 years – that includes a 10-year grace period.
The concessional loan is covered by Tokyo’s Official Development Assistance (ODA) for the acquisition of two large-scale patrol vessels for the Philippine Coast Guard (PCG).
The loan agreement was signed by Finance Secretary Carlos Dominguez III and JICA President Shinichi Kitaoka during President Rodrigo Duterte’s official visit to Japan.
President Duterte and Japanese Prime Minister Shinzo Abe witnessed the signing of the loan agreement, as well as the exchange of notes on the pact between the Department of Foreign Affairs and Japan’s Ministry of Foreign Affairs.
The DOF noted the loan is part of "Tokyo’s continuing assistance to the PCG’s Maritime Safety Capability Improvement Project (MSCIP)."
The acquisition of two 94-meter patrol ships, under Phase Two of the MSCIP, is on top of the ongoing ODA from Japan for the first phase of the project which involves the procurement of 10 40-meter PCG patrol vessels.
One of the 10 patrol vessels was delivered to the Philippines on August 16, while the second vessel is expected to be handed over in December this year at the Japan Marine United Shipyard in Yokohama.
The delivery of all 10 vessels is expected to be completed on August 2018.
Japan also announced the provision for additional vessels for the PCG through a ¥600-million grant (P280 million) for the procurement of high-speed boats and other equipment to boost the Philippines’ anti-terrorism and security activities.